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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Henry Volquardsen who wrote (68389)	9/29/1999 8:22:00 PM
From: Alias Shrugged	Respond to of 132070

Thanks, Henry.

To: Henry Volquardsen who wrote (68389)	9/29/1999 9:15:00 PM
From: Merritt	Read Replies (1) \| Respond to of 132070

Henry: Thanks for taking the time and effort to share your thoughts with the thread, I appreciate it. I've been under the impression that the debasement of the dollar that took place in the 70's was a result of a chain of events - OPEC raising prices - because of the dollars weakness that resulted from Nixon removing the International Dollar from the gold standard in '71 - which he had to do because it was artificially priced, and countries were redeeming their dollars for gold - the dollar was pegged at $35oz, and the actual market was $150oz - the reason for the disparity between the peg, and the market price, was because of a lack of confidence in the dollar - and the lack of confidence was because people/countries didn't feel the dollar could withstand the U.S. fighting a war on two fronts - 'Nam, and Johnson's War On Poverty. If my interpretation is correct, then the removal of the International Dollar from the gold standard acted to exacerbate an already iffy situation. Volker's tightening of the money supply, and "allowing" the prime to go, if my memory serves, as high as 22%, served to solve the problems of the time. I'm thinking that Mr. Greenspan's spamming dollars around the globe, and our large trade deficit, have created another set of problems...and until they're addressed with some fiscal prudence, the dollar is vulnerable...and gold might not be such a bad haven - or maybe the euro - or maybe Swiss Francs (I don't think they'll go through with their sales). I'm not a believer in putting a percentage of my assets into gold, and leaving it there...but when the dollar looks suspect, maybe it's not such a bad idea. Maybe Volker ushered in a new paradigm, maybe la plus ca change, la plus ca meme chose. Best regards, Merritt

To: Henry Volquardsen who wrote (68389)	9/30/1999 8:49:00 AM
From: long-gone	Read Replies (1) \| Respond to of 132070

<<The question in my mind is whether gold is the best store of value. I think that in the past twenty years it has been replaced by the major currencies and specificly the US dollar (I can hear the howls of laughter coming from the gold bulls now <g>). And there are specific developments over that period that have caused this shift. The global capital markets are significantly different today than they were 20 or more years ago. Prior to the early 70s currency values were essentially fixed and were tightly managed by the major governments. >> Henry, Well said, and many class me(somewhat wrongly) as a "gold bull". But something "funny" has gone on in the broad gold market over those last 20 years, more the last 6-8 than before that. While I don't see "gold as money" as much now as 25 years ago, I'm far less sure what the next 20 years may bring. Seems to me, the demand for the limited element(will even sidestep the "commodity Vs money" issue) fact remains it has a great many uses & jewelry demand is growing by the moment & there is far less gold on earth than even petroleum. Then there is the problem that very little gold is actually "used up" / fully expended as in petroleum. 1. I think we've seen bottom in price or very near it. 2. I don't expect a "sudden and solid" recovery to the $800+ dollar glory days. 3. I do believe it will return there(and possibly even more), but have no idea how long it could take. Don't you agree there is more "up side reward" than "down side risk" from here - with slight possible trouble spot 1Q & 2Q 2000?